“Metallurgical coal demand has trended steadily downward in recent weeks, most notably in the export market,” said Patriot President and CEO Richard M. Whiting. “These production cuts, in conjunction with other cost-reduction measures being implemented concurrently, are aimed at lowering our mining costs, aligning production with identified sales, and preserving high-quality reserves for a stronger market. During 2011 we increased metallurgical coal production to match the needs of the market. The modular nature of our Met Build-Out program allows flexibility to dial production up or down in line with market circumstances.”

In related news, Patriot Coal has entered into a consent decree with the Ohio Valley Environmental Coalition, the West Virginia Highlands Conservancy and the Sierra Club to resolve claims under the Clean Water Act relating to its mining activities in West Virginia.

As a result of the negotiated settlement, the company has agreed to a comprehensive plan which provides for the necessary time and flexibility in the development, selection and implementation of emerging technologies to meet compliance deadlines in the future. To resolve claims related to the consent decree, the company will pay $7.5 million in civil penalties, to be allocated between the federal government and the West Virginia Land Trust for land preservation projects within the Kanawha River and Guyandotte River watersheds.

The consent decree, which has been filed with the U.S. District Court for the Southern District of West Virginia, is subject to a public comment period and must be approved by the court before it becomes effective.